IPhone App Pricing Strategy

https://news.ycombinator.com/item?id=2097527

by michaelbuckbee • 16 years ago

5 9 16 years ago

news.ycombinator.com

I'm almost ready to launch my first personally developed iPhone app. It has a strong value proposition (you scan the barcode of DVDs/BluRays and it adds them to your Netflix queue).

I had wanted to launch with a price of $4.99 and the applesque pricing anchor of "half the price of a DVD".

The app actually tracks how much it would have cost to buy all of the DVDs that you scan in as well.

Is it better to try and release this for free (for a short period of time) with the goal of getting on the "New and Notable" listing or does it make more sense to launch with a high initial price and then lower it for special promotions?

allenbrunson• 16 years ago

it's sad, but the iphone ecosystem says apps should be very cheap. i'm going to guess that there is no way you can convince people to pay five bucks for an app that simple. my guess is the market will value it closer to two bucks.

here's what i would do. start it off at two bucks. call it an "introductory price." if you get any takers at that price, try raising it a buck or two. but my guess is that you won't get many, so you're next step is to drop it to free for awhile.

i went through a lot of this for my first paid iphone app. it is in many ways counterintuitive and ugly.

michaelbuckbee4• 16 years ago

What drives me crazy is that simple is so hard. My original design had 3 tabs for different settings, and functions and all of these tweaks and from user feedback I cut it down to just a few screens.

I ended up trying to make it the most minimalist Netflix app possible as all of the others seem to have buttons and images flying everywhere, but maybe that's what people want.

pjy04• 16 years ago

I agree with your notion to release this for free but the $4.99 price point is kinda high for just one value prop of scanning to add to my netflix queue.

Maybe you can make more money if you add a feature where you can add to cart and buy through amazon or price comparison while getting affiliate money?

michaelbuckbee4• 16 years ago

I believe that Amazon's API actually prohibits barcode scanning for price comparison (their own Amazon iPhone app does this).

I had considered doing a more widely integrated application, but it got very kludgy very fast and I've always felt that the most popular iPhone apps were very simple.

dazzla• 16 years ago

Amazon's Associates API requires prior written permission for any mobile use. Apparently they are giving that out a little more now. I sure hope they give me permission.

michaelbuckbee4• 16 years ago

Link: http://flickscanapp.com

SHOwnsYou• 16 years ago

I'd be interested in being able to select adding it to my instant play queue or my regular queue.

Or even better would be setting my instant queue as the default, but if it's not available for streaming, adding it to my regular queue.

michaelbuckbee4• 16 years ago

What you are describing is the actual default behavior of the app. The only configuration option is to turn off Watch Instantly altogether (for people like my parents).

The app also pulls your DVD or Bluray preference for discs and only applies those to your queue.

ykomada• 16 years ago

From a slightly over-structured perspective, you can think of pricing strategy in one of three ways: cost+, value to customer, or competitive benchmarking (market). You can probably figure out the meaning of all three but in case not:

Cost plus is simple in that you calculate how much it cost you to make something and then charge more than that per unit, ideally with a margin you are happy with. Not too applicable to this situation, but if you want to think about it, take your hourly salary * # hours you spent on this for total cost. Figure out how many downloads you can realistically get at some price and then you go from there (hint, 99c is probably ok from this perspective).

Customer value pricing is much more of a nebulous science. Basically, you try to figure out how much value people attach to certain product characteristics or functionalities. In reality, you can observe customers, interview/survey them and do other experiments. From a more basic perspective ask yourself this: how big of a problem does my product solve and how important is that problem? The QuickOffice app solves a huge problem for me (I can't get my computer files or edit them on my iphone)and so I paid $9.99 for it. Angry birds solves a smaller problem (I'm bored for a few minutes) so I only pay 99c for it. How do you know how big of a problem you are solving? Ask yourself what a user would do if they didn't have your product: without QuickOffice, I would have to drive back to my house and get my laptop. With Angry Birds, I just read the news for a few minutes instead. With your app, I could foresee the problem being solved by manually entering the movie title.

For iPhone apps, competitive benchmarking is most important. Really, unless your app does something extraordinary, it should be 99c or free. However, in your case, I assume you might be doing doing this in order to learn. You will learn more if you get more downloads, and therefore more user data/feedback. Therefore, there may be greater value for you would be to put it out there for free. Use the experience and insights you gain from this to build something even better in the coming months/years.

IPhone App Pricing Strategy

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